SOUTH COAST — The real estate market for Coos County and its coastal cities has been more or less static for quite some time.
“We have a very limited inventory right now,” Brooke Yussim, principal broker with Oregon Bay Properties said.
According to Yussim, the latest market action in Coos County for May had Coos Bay with just 4.5 months worth of inventory.
“Two years ago we had seven months of inventory, and even before that we had 10 to 12 months a couple years ago,” she said. “So we just don’t have inventory, our prices are up on average, and inventory is low and that’s one of the reason’s prices are up when you have less homes for the buyers to choose from -- the competition is that much more fierce.”
When real estate agents refer to inventory they are measuring how long it would take to sell all the residential real estate inventory currently on the market.
In 2008, Coos Bay had 25 months — or more than two years — worth of inventory.
In 2010, that number dropped to a little more than 10 months.
“That was the bottom of the market,” Yussim explained. “People weren’t selling, more were foreclosing and inventory dropped by more than half.
By the end of 2016, the greater Coos Bay area had just 5.7 months of inventory.
“That’s how you know you are losing inventory and that’s why prices are so high,” Yussim said. “It’s simple economics.”
In the past year, the average sales price of a home in Coos County rose more than 8 percent, according to data from RMLS.com, the Pacific Northwest’s regional multiple listing service and searchable database for real estate.
In Coos Bay, the average price rose approximately 12 percent.
When compared to past years, the waters become muddied.
In 2006, the average home price was $211,000, with 805 closed residential sales and 1,671 new listings.
Ten years later, the price had fallen during the Great Recession and rebounded to $194,000, with 813 closed sales and 1,305 listings.
To date in 2017, the average price of a home has ticked back up to more than $207,000, a more than 13 percent increase since last year.
“We’re back up to the prices where the bubble was,” Yussim explained, adding that the local population was still hurting from the economic downturn. “You don’t recover all that fast but the population in general seems to be growing. It is substantial and more people are moving to the area.”
Annette Shelton-Tiderman, Coos, Curry and Douglas counties’ regional economist for the Oregon Employment Department said Coos County has only seen a population increase of roughly 200 individuals over the past year.
But even a relative uptick in population coupled with a limited amount of inventory increases market prices.
“What we have listed is selling because there is such a limited amount,” Yussim said.
Shana Jo Armstrong principal broker and founder of Red Door Realty said the inventory was the lowest the area had seen since 2007.
“I have buyers that we literally cannot find them houses,” she added. “If you go to RMLS.com and read the statistics you don’t really see more houses than they were last year but what you’ll see is low inventory.”
Armstrong said the lower inventory is a result of supply and demand.
According to Shelton-Tiderman, the dearth in new homes is a product of a declining construction work force and a market that, even today, is still feeling effects from the recession of the 1980s and the Great Recession 10 years ago.
“Two-thirds of our housing inventory was built before 1980,” she said. “But the question is, if we had the (building) permits, if we were building, would we even have the workforce to do this? I think that the construction industry is truly foundational to the economic well-being to the county as a whole and its residents,” she said. “The construction industry — as with many others — got hammered during the recession, so recovery is extremely slow.”
After construction jobs in the county peaked in 2006 at around 1,100, available positions plummeted precipitously, with the industry losing as much as 36 percent of its workforce, according to the US Census Bureau’s Residential Construction Branch. Since then, the number of jobs have hovered at roughly 800.
Shelton-Tiderman attributed the falloff to the national housing crisis and a decline in building permits issued since 2005.
She said that even though the construction industry has returned to around 75 percent of peak employment levels, the numbers need to keep climbing. “The industry is one of the counties’ most important sources of higher-paying, low-skill jobs and is responsible for a substantial spillover effect in the broader economy.”
Another advantage of a healthy construction sector workforce is the foundation to begin new housing projects.
“We don’t have any building projects to speak of, so if the price is going up, that tells me there’s a demand for housing,” Shelton-Tiderman said.
Compounded with the demand problem is an aging construction workforce, where one in five workers is over the age of 55.
Add that to a county that has only seen a population increase of roughly 200 individuals over the past year and the result is a fading workforce with no one to replace them.
“We can say we have a stable or stagnant population but we are not growing,” she said.
Jim Berg, owner of North Point Real Estate and Development and a sitting member on Coos Bay’s Planning Commission, told The World last month the housing market would need time to recover.
"There's limited inventory and we have more people looking than properties for sale but the inventory will develop as we start to see more building," he said.
In the end, Shelton-Tiderman admitted that she didn’t have a panacea to solve the myriad of problems affecting the South Coast economy.
“Building is not something that you can just pop up overnight,” she said. “It’s going to take time: you have to have the roads in place, sewer lines, power lines ... it’s an investment from a community perspective and it involves everyone in the community; all different businesses. But the demand is there.”
The economist did however offer perspective on why she believes the South Coast is still struggling and will continue to do so until its communities take action.
“Housing seems to be that common denominator for economic well-being in the area,” she said. “Housing and construction go hand-in-hand: the construction industry was decimated, its workforce is older and there’s a high demand for housing but a scarcity of workers.”